Epstein The Theory Of Gambling And Statistical Logic
A betting strategy (also known as betting system) is a structured approach to gambling, in the attempt to produce a profit. To be successful, the system must change the house edge into a player advantage — which is impossible for pure games of probability with fixed odds, akin to a perpetual motion machine.[1] Betting systems are often predicated on statistical analysis.
Mathematically, no betting system can alter long-term expected results in a game with random, independent trials, although they can make for higher odds of short-term winning at the cost of increased risk, and are an enjoyable gambling experience for some people. Strategies which take into account the changing odds that exist in some games (e.g. card counting and handicapping), can alter long-term results.[1][2][3]
Recent advances in the field, particularly Parrondo's paradox, have triggered a surge of interest in the statistical and mathematical theory behind gambling. This interest was acknowledge in the motion picture, '21,' inspired by the true story of the MIT students who mastered the art of card counting to reap millions from the Vegas casinos. He invented gambling. Richard Epstein's classic book on gambling and its mathematical analysis covers the full range of games from penny matching, to blackjack and other casino games, to the stock market (including Black-Scholes analysis). He even considers what light statistical inference can shed on the study of paranormal phenomena.
This is formally stated by game theorist Richard Arnold Epstein in The Theory of Gambling and Statistical Logic as:
Theorem 1: If a gambler risks a finite capital over many plays in a game with constant single-trial probability of winning, losing, and tying, then any and all betting systems lead ultimately to the same value of mathematical expectation of gain per unit amount wagered.[1]
Examples[edit]
Common betting systems include:
- Card games – Card counting
- Roulette – Martingale
- Sports – Handicapping
Horse racing[edit]
Some Horse racing betting systems can be based on pure statistical analysis of the odds, while others also analysis of physical factors (e.g. the horses' form, jockey form and lane draw). Common forms of betting systems for horse racing are:
- hedging- betting on multiple outcomes in a race
- arbitrage- lay the horse a low price and back it at a high price
See also[edit]
References[edit]
- ^ abcEpstein, Richard A. (2014-06-28). The Theory of Gambling and Statistical Logic, Revised Edition. Gulf Professional Publishing. p. 53. ISBN9780080571843.
- ^Shackleford, Michael. 'The Truth about Betting Systems - Wizard of Odds'. wizardofodds.com. Retrieved 2017-10-09.
- ^Burrell, Brian (1998). Merriam-Webster's Guide to Everyday Math: A Home and Business Reference. Merriam-Webster. p. 226. ISBN9780877796213.
The Theory Of Gambling And Statistical Logic By Richard A. Epstein
